Two weeks ago, Egyptian e-commerce fulfillment startup Flextock raised the largest pre-seed in MENA. But that has changed today with Telda’s fundraise surpassing that record with a considerable margin in both MENA and Africa (Autochek’s $3.4 million) for now. The $5 million raised is the first investment by Sequoia Capital in the Middle East & North Africa.
Telda is a fintech that wants to change how Gen Z in the Middle East spends their money. Launched last month, Telda allows users to sign up for a digital account that comes with a free Mastercard-powered card. The card can be used for online payments, in-store purchases, and cash withdrawals. But while the service is currently live, Telda cards are yet to be distributed to existing and new customers.
The Cairo-based startup was founded a little over a month ago by Swvl’s co-founder and former CTO Ahmed Sabbah and Youssef Sholqamy who was previously a senior engineer with Uber’s infrastructure team. Sabbah said he and his co-founder had been looking at the fintech space at their former workplaces. However, after his experience using N26 while visiting a friend in Berlin in 2015, his eyes opened to the possibilities of digital banking in Egypt.
The startup already has over 30,000 sign-ups with over 17,000 people who’ve requested the card from the app. Telda in a statement said that it has become the first company in Egypt to receive a license from the Central bank of Egypt under the new Banking Agents regulations. The license allows them to issue cards and onboard customers digitally. Its co-founder and CEO Ahmed Sabbah told MENAbytes that it is difficult to define an exact timeline as there are multiple stakeholders involved in the process but it’s now a matter of weeks before they start shipping the cards to users who are on its waitlist.
Explaining the details of how Sequoia invested in the company, Sabbah revealed that it started with a cold message on LinkedIn that he had sent to a partner at the firm. He then spoke with multiple people at the firm and Sequoia gave him a term sheet a few weeks later.
The American VC had previously led a $2 million seed round in Brazil’s Nubank, a neobank that is now valued at $25 billion and has close to 40 million customers across Latin America. Nubank was founded by a former Sequoia partner David Vélez.
George Robson, the Sequoia partner who led the investment in Telda sees many parallels between Brazil and Egypt, “Both countries boast a large, young, talented and tech-savvy population with a strong appetite to innovate. We are delighted to partner with Telda and earmark our first investment in the region,” he said in a statement.
Telda intends to fast-track its card production and distribution with this new funding. It also plans to capitalize on Sequoia’s name for hiring and expansion, the CEO continued.
“I think hiring is key for us. We want to scale the team into a world-class team that’s willing to tap into the opportunity. What we aspire for is basically growing in Egypt, start to deliver cards for the early adopters, and we see ourselves reaching close to a million cards in our first year.”
With the majority of Egypt remaining unbanked and even those who have a bank account are generally not happy with the digital experience offered by traditional retail banks, Telda might just be the next biggest thing out of Africa!